As told to CRL by the borrowers regarding Advance America payday loans:
Arthur Jackson, 79, a 69-year-old warehouse worker and grandfather of seven, went to the same Advance America payday shop for over five years. His total interest paid is estimated at about $5,000 for a loan that started at $200 and eventually increased to a principal of $300. Advance America flipped the loan over a hundred times, collecting interest of up to $52.50 each time. Every payday, rather than defaulting or coming up short on bill money, Jackson went into the Advance America store, renewed his loan, and paid the fee. The clerks knew him by name, and often had his paperwork ready for him when he came in.
Anita Monti, 80 an older American, went to an Advance America payday loan store in hopes of finding a solution to a common problem—how to afford Christmas gifts for her grandchildren. Unable to repay both the principal and interest on the initial loan, Monti had no choice but to renew her loan with Advance America every payday, paying $45 many times to keep the same $300 loan outstanding. She went to a second payday lender, Check ‘n Go, to help repay Advance America. Monti could not afford the $820 it would take to pay off the two loans in full and get out of the trap. After just four months, she had paid almost $1,000 in fees and still owed the $820 in principal borrowed. “I got a promotion and a raise, but I never saw any of that money,” said Monti. She finally went to her church for help making her rent payment and to a consumer credit counseling agency for help in negotiating a repayment plan for the payday loans. It took Monti nine more months to complete these payments.